Strategies to Control and Capitalize Your Freight Data
Transportation and logistics professionals are experiencing a flood of new data, data-sharing systems, and analytics. But as tech stacks and data collection methods evolve, the surge in visible information can easily become siloed and overwhelming.
As these technological advancements continue to emerge, knowing how to manage — and maximize — your freight data to its full potential without getting overwhelmed is essential.
Let’s explore some factors contributing to an overwhelming influx of new data and how you can effectively control and use it to achieve your goals.
What makes data overwhelming?
Data visibility is vital to delivering a smooth supply chain for your customers. It’s often a lack of visibility that causes disruptions or challenges in responding to disruptions. The pandemic ignited the insistence for these platforms, and the supply has grown alongside demand. In the meantime, economic instability, geopolitical conflicts, and extreme weather events have strained manufacturing supply chains.
While these high-transparency systems are powerful tools, making data-driven decisions without a strategy can create problems, too.
Here are some issues that may arise without a solid strategy:
Excessive data — Some may argue there is no such thing, but DDC experts differ. It’s easy to get overwhelmed when you invite every kind of data possible. This may create a domino effect, such as over-hiring personnel to sift through data or overinvesting in additional softwares to help parse valuable insights from shallow numbers. This also creates the undesirable opportunity to easily miss key lead and lag indicators that could help you move the needle.
Instead of trying to collect and assess every fact and figure available, prioritize the metrics you need to track to achieve your goals. Establish an index of key performance indicators (KPIs) to measure, and focus primarily on those data points for analysis and reporting (even if you continue to collect additional data). Work with your partners to require seamless reporting and access to these important pieces of information based on how and when you need them. Communicate clearly and hold your vendors accountable to prevent scope creep in your reporting.
Inaccurate data — Data-driven decisions are worth little without quality data and could be detrimental to your business. If your data is inaccurate, your insights will also be inaccurate. To combat this issue, check the quality assurance methods of your data collection sources. What is your audit process? What is your acceptable margin of error?
Implement guidelines around reject rates and set the standard for what is deemed acceptable to welcome data into your business systems. For more on reject rates and why they are important, watch this FreightWaves TV segment, Reject Rates and Load Planning: What You Need to Know.
Missed Innovation — Without a proactive strategy for harnessing and leveraging freight data to achieve business goals, investment in innovation will be reactive and subject to unexpected budget requests.
For example, Artificial intelligence (AI), or machine learning, is a powerful tool for leveraging data meaningfully and securing long-term operational efficiency ROI. It has become clear to the marketplace that the sky is the limit with AI. You have the power to set your business on a trajectory of continued improvement for the foreseeable future. However, AI tools are launching in droves. Which is best for you? Which provides the data that you need and that you will utilize immediately? Carriers and 3PLs must have a thorough plan as part of their strategy to address which technology products they will invest in and how they will implement them.
If you don’t utilize it properly, you risk inaccuracies, slowdowns, and cash flow issues.
Fragmented and inconsistent procedures – When your data isn’t centralized, you may have to contact different teams to gather the necessary information. It may be hard to find specific data due to departmental silos or platforms that don’t easily integrate. Communication of the value of the data and how to act on it will be unclear, and therefore your team will execute inconsistently.
For example, if multiple partner organizations provide your company with important data, but none of their platforms can talk to one another, and each relationship is maintained by a different department or team, the data will not be used wisely or effectively. This can be incredibly challenging if data isn’t digitized. Some organizations even rely on traditional pen and paper for spreadsheets, logbooks, and bookkeeping, which makes data challenging to share.
How can data be simplified and deployed strategically?
Data doesn’t have to be overwhelming. There are plenty of best practices you can implement to manage your data and make sound, data-informed decisions effectively:
Set goals with KPIs and benchmarks. Setting KPIs for your goals lets you know exactly what intelligence you need to collect. With KPIs, you can set benchmarks, or “scores,” that you’d like to improve upon or maintain over time. Determining which metrics are meaningful and contribute to bigger goals can help filter unnecessary information.
To determine what data points to prioritize, define the company's overall objectives. Examples include increasing operational efficiency, delivery times, and customer satisfaction; or reducing fuel costs, accidents, or days sales outstanding (DSO). Each goal should be Specific, Measurable, Achievable, Relevant, and Time-bound (SMART).
Then, choose the most relevant KPIs that will help measure progress toward those goals. Common KPIs that DDC’s carrier partners have include on-time delivery percentage, fuel efficiency, vehicle utilization rate, driver retention rate, maintenance costs per vehicle, safety incidents, customer issue resolution, empty miles percentage, and more.
Once the KPIs are selected, create benchmarks to provide valuable context and allow the company to compare its performance with that of competitors or industry leaders. This helps in maintaining goals that are both realistic and ambitious.
Consolidate platforms. Be selective and refine focus. In your strategy for investment, carefully evaluate the technical capacity and the company you are entering an agreement with. Adhering to firm guidelines within your procurement process will enable you to ensure your investment remains concentrated on your strategy and prevents unnecessary sources and stakeholders from entering your data ecosystem.
A single cloud-based platform is recommended for ensuring one centralized, secure home for credible data. This makes it easier to share information securely with relevant internal stakeholders and suppliers. If you need to work with multiple platforms, use integrations and APIs to connect them.
Prioritize integration/interoperability. Interoperability goes a long way toward creating a more efficient, streamlined data-sharing system. When your platforms can communicate with one another, you can avoid data silos, prevent breakdowns in communication, expedite information sharing, and optimize operational processes throughout your organization.
For example, if you can access both bill of lading (BOL) and route-planning data within the same platform, you can leverage both more effectively to reduce time-in-transit and move freight quicker. You can also monitor shipments easier when your systems integrate to protect your shippers’ cargo. In 2022, a staggering $223 million worth of cargo was stolen, with each incident averaging a value of over $200,000. You can prevent this for your customers and mitigate demurrage and detention charges when all your systems integrate and flow data into the same platform(s) seamlessly.
Have a plan for mining and processing data. Mapping out how you’ll utilize your data will enable your team to precisely find the necessary insights without getting bogged down by irrelevant data. Understand the forecasted rise in the information entering your system and assign strategic roles with ownership. Uphold accountability and incentivize usage. Encourage teams to confirm the flow of data and review and make suggestions for optimization.
When selecting partner organizations to work with, assess their data collection and reporting capabilities and how they will integrate with your internal processes. Do not compromise on what matters most to your organization.
What strategies can you use to maximize the value of data?
Data can play a vital role in navigating the uncertainties of the shipping journey and achieving your goals. Maximizing the value of data comes down to adequately gathering, analyzing, and applying data insights to your operation in the most informed, organized, and efficient ways possible.
But what does this look like in practice? For example, if your objective is to optimize your operation for greater efficiency and to uncover revenue potential, one strategy could be to analyze and harness the data living within your bill of lading fields.
Once you know how to leverage your freight bill data correctly, you can maximize your overall operational value.
How can analyzing BOL data fields drive results?
Analyzing BOL data fields can inform sound logistics planning and help optimize your operations. Here are a few BOL fields that can yield meaningful insights.
Weight of shipments — Tracking the weight of shipments can help you pick out discrepancies between order placement and pick-ups. You may decide to implement minimum weight requirements or invest in tools that help prevent ongoing discrepancies. Issues of reweighs and surcharges may be impacting your customer experience, which can also inform logistics decisions.
Names and addresses — Geographic trends data extracted from shipper and receiver names/addresses can also yield key insights for logistics planning. You may find ways to increase efficiencies through names and addresses, like combining cargo headed in the same geographic direction. You can also track and trend these insights for demographic-based marketing.
Types of packaging (e.g., pallets, drums, skids, cartons) — Looking closely at the packaging you use can help you analyze how these materials impact your load capacity and what industries you may want to target for business development.
Stated value of shipped cargo — Analyzing the stated value of your cargo can tell you how often the stated values are correct or not. This data can help you decide whether you amend disclaimers to shippers or revise your liability insurance.
Make your data work for you.
As data collection and analysis becomes more accessible, you'll need to be discerning with the information you capture and the resources you have to mobilize it. Implementing an intentional strategy to control and capitalize on your freight data will make concluding, reporting, complying with industry standards and regulations, and making informed decisions easier and faster.
Your freight data management plans shouldn’t be set in stone, either. Continually revisit your plans to ensure you’re taking advantage of new opportunities and growing alongside your clients and partners.
The DDC team delivered data capture and processing solutions for over 33 years, with specialized support for transportation and logistics for 18 years. We understand this market and the demand for data throughout the supply chain. Carriers and 3PLs rely on our experience and expertise to extract the full potential of their data every day. See all our business process outsourcing services here.
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